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Talk the Talk or Walk the Walk? An Examination of Sustainability Accounting Implementation

Author

Listed:
  • W. Eric Lee

    (University of Northern Iowa)

  • Amy M. Hageman

    (Kansas State University)

Abstract

This study examines how ambiguity in corporate objectives affects managers’ choice between opposing sustainability and short-term profit goals. We test this question with an experiment in which we vary whether environmental sustainability is included explicitly (vs implicitly) as a strategic objective that is used for managers’ performance evaluations. Findings show that managers increase (decrease) biodegradable production and correspondingly decrease (increase) short-term profit when environmental sustainability performance is explicitly (implicitly) incorporated within the company’s strategic objectives. Also, managers in the implicit incorporation group are more likely to decrease (increase) their biodegradable production when they learn that their counterparts within the firm have chosen to decrease (increase) biodegradable production in other product lines. Further, managers in the explicit incorporation group have greater trust in senior management, and that trust mediates the negative relationship between incorporation ambiguity and the level of biodegradable production. The theoretical and practical implications of this study are discussed.

Suggested Citation

  • W. Eric Lee & Amy M. Hageman, 2018. "Talk the Talk or Walk the Walk? An Examination of Sustainability Accounting Implementation," Journal of Business Ethics, Springer, vol. 152(3), pages 725-739, October.
    • Handle: RePEc:kap:jbuset:v:152:y:2018:i:3:d:10.1007_s10551-016-3282-8
    DOI: 10.1007/s10551-016-3282-8
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    References listed on IDEAS

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    4. Fabio Caputo & Lorenzo Ligorio & Simone Pizzi, 2021. "The Contribution of Higher Education Institutions to the SDGs—An Evaluation of Sustainability Reporting Practices," Administrative Sciences, MDPI, vol. 11(3), pages 1-13, September.

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